Selling a business isn’t as easy as waking up one day and posting a For Sale sign in the window. At Crowne Atlantic Properties we’ve seen our fair share of business selling mistakes. To help you avoid making the same mistakes, we’ve compiled a list of the 5 most common mistakes sellers make when selling a business.
The 5 Most Common Business Selling Mistakes
- Timing. It’s true that the best time to sell a business is when you don’t need to. This gives you the freedom to choose the best time to sell and the luxury of time to wait for the right offer. It’s true, life doesn’t always work out for this to happen, but if possible don’t rush into selling. If you can, wait until profits are high, turnover is low, and/or demand for your product or service is great. It will be much easier to attract the attention of buyers and justify your sales price if the business is doing well. In an ideal world, buyers and bankers want to see an upward trend for three years.
- No Preparation. We’ve seen too many business owners decide they need to sell NOW and rush into selling without any forethought or prep work. This inevitably backfires when buyers ask for detailed information that you don’t have ready or if you receive an offer and have no idea if it is fair or not. Preparing to sell means deciding why you are selling, setting a goal for what you want to achieve from the sale, getting your financial information in order and ready for review, researching market pricing so you can set a realistic sale price and negotiate if necessary, and planning how to market the property.
- Being Inflexible. Don’t make the mistake of being too rigid, over-negotiating, refusing to negotiate at all, or ignoring feedback. Deals fall through when one side feels slighted, cheated, or disrespected. Take a collaborative approach, be open to feedback, and focus on the big picture. Everyone (the seller, the buyer, the brokers) wants the same end goal – your business to sell. Don’t get hung up on small details that can cause misunderstandings or hurt feelings because that is where deals start to break down.
- Pricing. This is the number one reason why businesses don’t sell. You can do all the prep work you want, have your financials in perfect order, and hit the market at the right time, but if you overprice the business it just won’t sell. This is where the advice of a business broker can be invaluable. If you are serious about selling a business, you need to price it accordingly. A valuation report can help you decide on a price that is competitive, yet realistic. Sometimes buyer won’t even look at a business if the price is too high. Not everyone wants to beat down the Seller to get a great price. Buyers need it to start at a fair price.
- Trying To Sell On Your Own. Many of the above mistakes can be avoided by working with a business broker. Business brokers are experts at prepping, pricing, and marketing a business for sale and then negotiating the final sale. Remember, you will still be running your business while you are trying to sell it. Can you do both effectively? Many business owners can’t. They simply don’t have the time needed to properly sell a business. You’ll also be at a disadvantage if the buyer comes in with his or her own broker who will take advantage of your lack of knowledge about selling a business to benefit the buyer. With an experienced business broker on your side, you control the process from start to finish.
Avoid These Common Mistakes With Help From Crowne Atlantic Propertiess
For help selling your business, contact Crowne Atlantic Properties at 407-478-4101. Our business brokers can guide you through the selling process, act as your negotiator when on offer is made, and help you achieve your sales goals.